World Bank Launches Review of Social, Environmental Safeguards

WASHINGTON, Nov 16 2012 (IPS) - The World Bank has begun a highly anticipated reappraisal of its social and environmental “safeguards” policies, a process that is slated to take place over the next two years.

“We’ve begun the process of updating … these critical polices, which have been the cornerstone of our collective efforts to protect people and the environment,” Cyril Muller, the World Bank’s vice-president for external affairs, said Thursday at the institution’s Washington headquarters, which saw initial discussions on the review process.

“This is a key process as a way to make our institution as effective as possible,” he said.

These eight broad policies guide certain World Bank investments dealing with complex issues relating to indigenous peoples, involuntary resettlement, natural habitats and cultural resources. As such, the safeguards have long been a flashpoint for criticism and reform efforts by civil society organisations frustrated with certain bank projects or practices.

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In fact, the implications of the safeguards are broader than just the World Bank’s own work. As the bank stated in an approach paper on the review process released in mid-October, the policies have become a “global standard for other development partners”.

Yet many analysts have suggested that the bank has, over time, fallen behind the social and environmental assessments that have become standard in other multilateral development institutions.

In fact, following a critical internal report in 2010 that led to the current review, the bank appeared to agree. Within weeks of the report’s publication, then-World Bank President Robert Zoellick admitted, “To date, more attention has focused on financial risk than human risk. We need to redress that imbalance.”

In the immediate run-up to the beginning of the review process, high-level U.S. government officials have begun to emphasise the high stakes of the endeavour, including worries that the process could weaken rather than strengthen the safeguards.

“While it is important for the World Bank to move forward with a review of its current safeguard policies, there are concerns that the review could be used to dilute the … safeguards,” Nancy Pelosi, the minority leader in the U.S. House of Representatives, said in a late-September letter to U.S. Treasury Secretary Timothy Geithner.

“The review has the potential to produce a set of strengthened and innovative procedures that will be transparent enough to be enforceable and with sufficient budget associated with them to be effective. I support strengthening these safeguards to include prior assessments of human rights, working conditions, and a stronger focus on climate change mitigation and adaptation.”

Kim’s legacy

As Pelosi mentioned, a notable absence among the World Bank’s safeguard policies has been explicit reference to human rights, though the approach paper does note that the issue will be included in upcoming discussions. While the bank’s position has traditionally been that human rights are political rather than development issues, critics have increasingly pointed to the connections between rights and poverty.

“The World Bank has long ignored the importance of free speech, assembly, and association and other basic human rights,” Jessica Evans, a researcher with the Washington office of Human Rights Watch (HRW), said Thursday. “In the wake of the popular upheavals in the Arab world, the World Bank needs to recognise that human rights are critically important to its efforts to reduce poverty.”

Development aid, Evans warns, is often denied to the most marginalised members in society, including ethnic minorities, people with certain political opinions or those with disabilities. “It’s high time the bank actively addressed this by introducing a policy to prevent discrimination in all of its activities,” she told IPS.

Over the course of the next two years of reappraisal, HRW and the Center for International Environmental Law (CIEL) are calling on the World Bank to create mechanisms by which rights-related risks would be dealt with before any project financing goes forward. (By deadline, request for comment on this issue from the World Bank went unanswered.)

The groups are also suggesting that World Bank President Jim Yong Kim has a unique opportunity to modernise the institution, mirroring former bank president James Wolfensohn’s major new focus on corruption and other new initiatives on transparency.

“Just as Wolfensohn left as his legacy a bank that took seriously the impact of corruption on sustainable development, President Kim should work toward leaving a legacy on human rights,” Evans says. “The safeguard review is a key opportunity to show the bank will change under his leadership.”

Speedy safeguards?

Since he took over as head of the bank in July, however, Kim has been circumspect on just how expansive a result he would like to see emerge from the safeguards reforms process.

“Safeguards are a great accomplishment. We have absolutely no intention of diluting the safeguards,” he said at a roundtable in mid-October, noting also that the bank “doesn’t use the term ‘human rights’ but that isn’t out of a lack of respect for the idea. We want to ensure people have the things that they have a right to.”

Yet Kim also urged a speeding-up of the bank’s project approvals process. “We want to move more quickly on projects, similar to how we do it on emergencies,” he said. “We need to maintain commitment to safeguards but get through the process more quickly.”

The safeguards review will now proceed through three consultative phases through 2014, with the bank promising a wealth of updated information at this website, where the public can also register questions or concerns. A report on the first consultative phase is to be published in April.